Sunset Boards currently pays out 50 percent of net income as dividends to Tad an

Question

Sunset Boards currently pays out 50 percent of net income as dividends to Tad and the other original investors, and has a 20 percent tax rate. You are Paula

2013 2014 Cost of goods sold $169,969   214,607 Cash     24,524     26,056 Depreciation     47,980     54,230 Interest expense     10,442     11,954 Selling & administrative expenses     33,425     43,626 Accounts payable     43,344     48,090 Net fixed assets    211,680    264,021 Sales    333,426    406,427 Accounts receivable      17,378     22,542 Notes payable      19,757     21,571 Long-term debt    106,848   119,976 Inventory      36,570    50,185 New equity               0    20,160

Explanation / Answer

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Income Statement 2013 2014 Sales 333426 406427 Less Cost of Goods Sold 169969 214607 Selling & administrative expenses 33425 43626 Depreciation 47980 54230 EBIT 82052 93964 Interest 10442 11954 EBT 71610 82010 Taxes 14322 16402 Net Income 57288 65608 Dividends 28644 32804 Addition to Retained Earnings 28644 32804

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